Shares of A123 Systems, Inc.(NASDAQ:AONE) jumped another 54% to $0.19 in Monday’s session, extending its recovery to 280% from the recent low of $0.05.
Battery maker Johnson Controls will be buying the automotive operations of lithium-ion battery maker A123 Systems for $125 million.
According to the agreement between the two companies Johnson Controls will acquire A123's automotive business assets, including automotive technology, products and customer contracts.
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Johnson Controls will also buy A123’s facilities in Livonia and Romulus, Michigan; cathode powder manufacturing facilities in China; equity interest in Shanghai Advanced Traction Battery Systems Co.; as well as its joint venture with Shanghai Automotive Industry Corporation, a statement from the company said.
A123 and its subsidiaries have filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, Zacks Equity Research said.
The company is expected to receive $72.5 million from Johnson Controls as “debtor in possession” financing to support its operations during the sale process.
Meanwhile China's Wanxiang Group is also making a fair bid for A123's assets though it is yet to get the nod from the Committee on Foreign Investment in the U.S. and the government of China for the acquisition.
A123's woes started when it was unable meet the requirements of its main customer Fisker Automotive and also had to deal with costly recalls of its battery packs.
A failed $465 million with Wanxiang earlier, where the Chinese company was to infuse cash into the ailing battery maker worsened matters. Weak demand for its hybrid batteries forced the company into bankruptcy.